If you’ve determined what your idea will be and you’d like to move forward with the entrepreneurial process, you’ll need to do some preliminary market research to assess the viability of your idea.
To run a successful business, you need to do some market research to learn about your customers, your competitors, and your industry. Market research is the process of analyzing data to help you understand which products and services are in demand, and how to be competitive.
Determine your Target Market and understand your Customer
A common mistake with new business owners is assuming that if the business owner would buy the product, everyone else will as well. You need to know what potential customers want, what price they are willing to pay, how they decide what to buy, and where they buy it. Think seriously about who your potential customers are and start defining their demographics, including age, education level, geographic location, and income level.
Use customer forums such as http://www.nairaland.com to take a look at the customer reviews posted about businesses or products similar to your idea. This information can provide valuable insight into why a customer chooses one business or product over another.
Don’t forget to research complimentary and substitute products. These are products that are normally sold with (complimentary) or instead of (substitute) your product.
As you develop your business idea, don’t forget to talk directly to potential customers; these can be family, friends, and complete strangers. See how they react to your idea. Would they buy your product? Ask them what elements are important to them, whether it’s price, quality, reputation in the industry, or something else.
Get to Know Your Competition
It’s very rare that any two businesses are exactly the same, which makes it a good idea to get to know, and even network with, your competition in person. The rewards can include referrals (if you offer something that they do not) or if they are unable to take on additional customers, or even a joint venture. Use the web to conduct a search on popular business listings in your market. Assess how your offerings compare to your competitors.
What do you offer that is unique? How can you work that into your marketing plan to set you apart from the competition? Is your competition only local or is it global?
Understand your industry. You will need to know what others in your industry are doing, even if they are not your direct competitors.